Order leads company to meet annual target earlier than rivals


Daewoo Shipbuilding & Marine Engineering, or DSME, the nation’s second-biggest shipbuilder, announced on Wednesday that it won a deal worth 2.3 trillion won ($2 billion) to build four drillships for U.S.-based Transocean, the world’s biggest offshore drilling company.

It is the second drillship-building order for DSME this year, following one worth 600 billion won to build a drillship for Atwood Oceanics, an U.S. offshore drilling contractor, on Sept. 28.

All four drillships for Transocean will be built at Okpo shipyard on Geoje Island, South Gyeongsang Province, based on DSME’s own ultra-deepwater technology to operate at a depth of up to 3,600 meters. The drillships are scheduled to be handed over to the contractors one by one from the middle of 2015, the company added.

The recent drillship-building contracts have given the company an upper hand in its competition with its two major rivals ― Hyundai Heavy Industries and Samsung Heavy Industries ― in the third quarter.

“The two recent consecutive orders extends the company’s order amount to 11.6 trillion won ($10.4 billion), which means we already have achieved 95 percent of the annual order target,” the company said in its press release. “DSME also has become the first shipbuilder in the world to reach 11 trillion won ($10 billion),” it added.

Market watchers estimated that Hyundai Heavy Industries, the world’s largest shipbuilder, won 9.1 trillion won ($8.2 billion) worth of orders in the past nine months up to September, while Samsung Heavy Industries won 7.9 trillion won ($7.1 billion) worth of orders in the same period.

Hard hit by the global economic downturn, especially by the eurozone crisis, the nation’s top three shipbuilders experienced an “earnings shock” in the second quarter, posting minus growth in sales. However, industry watchers cautiously forecast gradual improvements in market conditions from the third quarter.

“Seen in the DSME’s consecutive order-winning results, the long-dampened shipbuilding industry is expected to gradually pick up from the third quarter this year as demand for high value-added shipbuilding projects like deep-water drillships and LNG-powered container ships is on a recovery track,” said Jeon Jae-chun, a stock analyst from Daeshin Securities.

By Seo Jee-yeon (jyseo@heraldcorp.com)